I’m 54 and disabled, what kind of Medicare Insurance do I need?

Janell Sluga Medicare & Individual Health Insurance Account Executive View Bio

Share this...

• Facebook
• Linkedin

Question:

I’m 54 years old and I’ve been disabled for almost 2 years so I think I’m eligible for Medicare. Do I need to sign up for any parts of Medicare, including drug coverage?

Answer:

That’s great news that you qualify for Medicare as you will now have comprehensive insurance to help cover your medical costs. It’s important to understand that there are many rules regarding Medicare and all its parts, and those rules apply when you qualify due to disability or age, though they differ slightly.

Anyone who has been approved to receive Social Security Disability (SSD) and did actually received it for 24 months qualifies for Medicare. To see what that means for each part of Medicare, we must first review your current health insurance.

Medicare Part A is hospitalization coverage, Medicare Part B is outpatient coverage, and Medicare Part D is for prescription drugs. All three of these “Parts” have different rules and costs.

Medicare Part A is free for anyone who has worked for ten total years. Part A starts automatically when you turn 65 AND collecting Social Security Income (SSI), OR, like yourself, once they have received SSD for 24 months. If you are 65 years old but NOT collecting Social Security, you must request Medicare Part A. There is NO PREMIUM PENALTY if you choose to start Medicare Part A later than your initial eligibility date.

For Medicare Part B, in certain situations where you start after you become eligible, you MAY BE PENALIZED. If you start it when first eligible, you pay a monthly premium (most individuals pay $185 per month in 2025). However, if you don’t start Medicare Part B when first eligible, and if you don’t qualify for certain exceptions to the penalty, you’ll pay 10% extra for each 12 month-period you are without Medicare Part B. This 10% premium penalty is tacked onto your Medicare Part B premium, which you’ll pay each month for the rest of your life. This can make your Part B premium very expensive.

If you get you have insurance through your employer or your spouse’s employer, you may not need to get off of that plan and onto Medicare, so this is one possible exception to the penalty. For anyone eligible for Medicare due to age, that employee group must be 20 or more employees. If they are receiving Medicare due to a disability, the employer group must have more than 100 employees. So if the group has less than 20 (aged into Medicare) or 100 (Disability then Medicare) employees, the individual MUST have Medicare A & B to avoid penalties.

If an individual gets coverage through an employer or their spouses’ employer, but then they retire, then they MUST sign up for Medicare A & B, no matter what the group size. If you did not “sign-up” for Medicare Part B, and instead only kept Part A, then this rule applies to you as well. You will have 8 months to join Medicare B after retiring. For those individuals who don’t sign up for Part B when they should have, they can be penalized or even have their enrollment delayed. I’ve have spoken with many people who were frustrated to learn this.

Even if you join Medicare Part A and/ or B, you may choose to keep the employee plan as secondary coverage. Alternatively, they could leave the employer plan, keep Medicare A & B, and enroll in additional products to go along with their Medicare (including adding a Part D plan).

Now let’s speak to the Medicare Part D rules.

In order to be eligible for Medicare Part D (Prescription Drug Coverage) you must be eligible for Medicare A or B or both.

Medicare Part D is also optional coverage. If you have Medicare Part A and/ or Part B, I recommend adding Part D. If you have Prescription drug coverage from another source, you may choose NOT to enroll in Medicare Part D. This drug coverage must be creditable (equal to or better than Medicare Part D Standard Plan).

If you don’t have creditable drug coverage from another source and decide to NOT enroll in a Medicare Part D plan, you will have a premium penalty. That Premium Penalty is 1% for each month you are without drug coverage. One percent does not sound like much, but it adds ups each month. A year is 12%, 2 years 24%, and so on. This is compounded monthly, so your penalty increases depending on the number of months you were without creditable drug coverage. This penalty is also something you will pay each month for the rest of your life. That 1% that’s added to your premium is actually a percent of the national average premium of the available Medicare Part D plans.

Here is an example: if you were eligible in June of 2016 for Medicare and chose NOT to enroll in Medicare Part D and then decided in December of 2016 to begin coverage in January 2017, you would have a 7% penalty on the national average of $36.78, which equals $2.57 per month. You will have to pay that premium penalty each month for the rest of your life, in addition to the actual premium of the Part D plan you choose.

Each part of Medicare has different criteria and rules to consider than the decision for Medicare Part B. And the rules do apply to EVERYONE, whether you qualify for Medicare based on age or disability. I may be repeating myself, but I don’t want any Medicare recipients to make a decision that could cost them in the future.